Microsoft and OpenAI’s AGI Gamble: A $100 Billion Quest for Intelligence

December 27, 2024 – According to a contract document revealed by tech media outlet The Information on December 26th, Microsoft and OpenAI have secretly attached a price tag to the elusive concept of Artificial General Intelligence (AGI).

For clarity, AGI refers to a hypothetical machine intelligence capable of understanding or learning any intellectual task that a human can perform. It aims to mimic the cognitive abilities of the human brain, boasting broader adaptability and learning capabilities, allowing it to execute various tasks without specialized training.

Interestingly, the 2023 confidential agreement between Microsoft and OpenAI ties the achievement of AGI to profitability, stating that once the AI system developed by OpenAI generates $100 billion in profits, it will be considered as having achieved AGI.

Over the years, Microsoft has invested over $13 billion in OpenAI, and this investment carries a unique clause. Upon the realization of AGI, OpenAI will be “freed,” and Microsoft will cease using any new technologies developed by OpenAI in the future.

The media outlet interprets this clause as a preventive measure against the excessive concentration of power after achieving AGI. However, at this stage, it also serves as a limitation on OpenAI’s financing capabilities and competitiveness.

As OpenAI plans to transition into being a profit-making company, both parties are currently renegotiating their cooperation terms. It is possible that OpenAI may terminate Microsoft’s exclusive cloud hosting services and profit sharing, instead offering Microsoft direct equity.

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